What is the Churches’ Mutual Credit Union Ltd. (CMCU)?
CMCU is a mutual society, a savings and loans co-operative owned and controlled by its members. It was formed in collaboration by the Church of England, the Church of Scotland, the Methodist Church of Great Britain, the Church in Wales and the Scottish Episcopal Church. It is run by a small but professional staff and governed by a volunteer board, which includes accountants, clergy, former regulators and experienced businessmen and women drawn from the participating denominations. In July 2016 the Credit Union extended its common bond to include eligible members of the United Reformed Church, and in January 2017 it was pleased to announced a further extension to eligible members of the Roman Catholic Church in England & Wales and in Scotland.
What are Credit Unions?
Credit Unions had their origins in ‘penny banks’ run by clergy in Italy a few hundred years ago, but it was a Lutheran Lay-Pastor Friedrich Raiffeisen who first gave them their modern form. He experimented with co-operative ‘village banks’ amongst poor communities in Germany in the 19th Century and established the model of savings and loan co-operatives functioning as mutual societies or ‘self help communities’. They spread from there to Italy and Canada and then across the border into the United States. They developed tremendously during the Great Depression as banks foreclosed on their customers and people looked for alternative forms of personal finance.
The first credit unions in Great Britain started in the 1960s amongst West Indian immigrants who found it difficult to access mainstream banks. Credit unions had no proper legal framework until the 1979 Credit Union Act, which served to kick-start the movement in Britain.
Credit Unions have a ‘Common Bond’, defining who can be members. This can be based on employment (all working for the same employer), association (for instance all members of a church) or on location – live and work in a particular locality. Since the Legislative Reform Order of 2012 it has been possible to mix and match categories of common bond. CMCU mixes an associational and an employment common bond.
Growth of the movement in Britain has been slow but is now accelerating as people look for a more ethical, ‘community building’ form of personal finance. The financial crisis has shown the need to diversify financial services in the UK and to re-build our once strong mutual sector. There are now more than 350 credit unions in Britain with a combined membership in excess of 1.5m